Friday, May 29, 2009

Car Maker Wage Differences

This coupled with contingent liabilities, how the heck do companies like GM and Ford expect to survive? OK, if I work in the American or Korean auto industry, I'd start learning a new skill Right NOW!

People today need to focus on job skills unlikely outsourced. The old adage of "Do what you love..." now ends with "Just Kidding!"

Sunday, May 24, 2009

Grim American Future

A basic look at American debt.

Saturday, May 23, 2009

Option ARMs trigger the next housing crisis

These mortgage holders (not really home-owners) belong to the middle and middle-upper class. Similar to subprime, Adjustable Rate Mortage payments reset at certain milestones to 50%+ higher. It peaks in 2011. As unemployment continues to grow, real estate prices will drop further.

Look at the stats from Credit Suisse

So the next logical question lies in exploiting this information for a profit. SHORT the REITs, into the rallies. Pretty obvious right?

Thursday, May 21, 2009

S&P500 Price/Earning at 122.45

Is 122 high for P/E? Hell yeah it is! Any individual stock with P/E greater than 30 becomes easily considered "over bought" by many institutional traders.

While the public remains cluelessly optimistic from the rally past few months, corporate earnings have dropped like a ship from heaven. The stock market has become well over priced. Time to wake up and smell the coffee!!!



The most basic measure of stock market value is price relative to the latest 12 months' earnings - the P/E ratio. In bear markets, investors terrified by bad news can drive the S&P 500 P/E ratio to under 10. In the 1974 bear market, this ratio dropped to 8 with many securities trading with even lower multiples. In bull markets, extreme optimism can drive the market's P/E to 25. In the 1995 bull market, many technology stocks were valued at over 50 times their prior 12 months' earnings, while the ratio for the S&P 500 fluctuated between 16 and 20.

Calculation & Significant Levels

S&P 500 Price/Earnings Ratio: Calculated by dividing the earnings over the latest 12 months' of the S&P 500 Index into the cash price of the index. A market P/E of 18 or higher is usually considered a sign of overvaluation. When the S&P 500 P/E drops below 10 the market is historically undervalued.

Description Source: Market Gauge

Saturday, May 16, 2009

Is anyone listening?

A moving documentary of kids who notice pressures from this economy off the parents.

Monday, May 4, 2009

Historical Real Estate Value for Newbies

This graph by Robert Schiller displays real (i.e. inflation adjusted) value of composite real estate in the US since 1890, to hopefully offer you guys a glimpse of truth. For decades, an illusion via inflation has convinced many that property value "always go up", not so. We can see this bubble has yet to fully burst and drip down to 100!

It concurrs with my notion that the fixed intrinsic value could make real estate betting undesirable. If we consider property taxes (AKA rates in NZ), structural depreciation, insurance costs, contingent liabilities, it is obvious that an upside bet on real estate requires VERY meticulous planning to end profitably.

Glenn Beck attempts to explore the political moves within the housing price chart. He gets pretty worked up, haha.

Sunday, May 3, 2009

Media integrity in 1934